Innovativeness, business performance and environmental uncertainty: a multivariate configuration

Abstract

This study attempts to explore the contextual nature of innovativeness - business performance relationship. Environmental uncertainty is being considered as the contingent variable. The study is descriptive and cross-sectional in nature. It relies upon a purposive sample of 457 North Indian firms. Confirmatory factor analysis assesses the psychometric properties of the constructs under investigation. Structure equation modelling is used to examine the impact of innovativeness on business performance. Multi-group moderation analysis evaluates the role played by environmental uncertainty in innovativeness-business performance relationship. This study finds that the pursuit of innovativeness is required for better performance. Results support the contextual nature of innovativeness-business performance relationship and reveal that firms operating in a dynamic environment are more likely to be benefited from the pursuit of innovativeness as compared to firms operating in a stable business environment. The study provides meaningful insights for managerial decision making and also attempts to draw the attention of management personnel towards the pursuit of innovativeness.